She stands legally in breach of contract. What she should have done is offered to pay for the additional mileage that she used, but she probably didn't as it would probably have cost another £2000. She has technically committed fraud. She needs to start again from scratch and declare she has had a policy cancelled. She will be able to get insured, but it will now cost much more. She needs to get a rebate from her previous insurer if they have cancelled it though because she paid in full. If she's only paid a proportion of the policy, she man actually owe them money. If she exceeded the mileage allowance by a small amount, raise a complaint and offer to pay the additional. If it was more than a thousand miles, you are on a very sticky wicket.
Never try and be clever with insurers, they will take any opportunity to cancel a contract if they believe you are in breach. Always best to overestimate your mileage.